Tata Elxsi multibagger stock story is remarkable. Find below the strong performance parameters of the company and growth outlook by management.
(A) Tata Elxsi YOY performance in last 4 Quarters
Key Margins in last 4 Quarters
(B) Tata Elxsi - 9 Months Performance till December 2021
(C) Tata Elxsi - QoQ Performance - 4 Quarters till December 2021
(D) Tata Elxsi Financial Performance - Last 10 years
(E) Key Operational Highlights Q3 FY22
EPD segment is "Embedded Product Design" Segment of Tata Elxsi. It contributes around 89% of the total revenue.
(E) Concall Highlights - Quarter ended December 2021
- Transportation business: The company diversified from passenger car vehicles to include commercial vehicles as well as off‐road farm equipment and the rail segment during last 6-8 quarters. Going ahead, these sub segments may contribute around 20% of the transportation segment of the company.
- Over 3 year roadmap, the company shall maintain 40:40:20 ratio between automotive, media & communication and healthcare
- JLR business impacted due semiconductor crises. It is growing and in next 2 quarters the budgets for R&D work shall increase.
4. Reasons for good revenue and margin growth:
- More ratio of fixed type contracts. Fix type contracts form about 50% of the revenue.
- Over last 6 to 8 quarters, the company became more and more strategic with many of the customers. The company has been able to strike long‐term deals with many of these customers and provide value to these customers right. So there has been a shift from a one‐off project basis to a more long‐term sustainable win‐win relationship from both parties.
- Tata Elxsi has always had an offshore‐centric approach and customers also always accepted that. Still, during these pandemic times, it also further cemented that kind of approach with the customer, so that is also helping Tata Elxsi. Earlier at pre‐pandemic level, Tata Elxsi's onsite mix was about 35%‐36% odd, now it is almost 23%‐24%, so offshore revenue mix has improved in the overall business.
5. The company's attrition rate increased in line with the industry. The company will continue to invest in its talent pipeline to support continued growth. It expects to continue to add employees in order to take advantage of increased business opportunities.
(F) Growth Outlook by Management
- The Management is moving towards its preferred revenue segmentation of 40:40:20 for Auto, media & communication and Healthcare.
- Tata Elxsi management finds no reason of current margins sustainability.
- Strong deal wins continue going forward in autonomous driving, EV and digital space.
- Wallet share of customers and deal sizing increased. Thus, this shall grow top as well bottom line.
- Management is taking efforts to improve attrition rate. Wage hikes planned accordingly,. Moreover, the company plans more hiring for supporting growth.
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References: Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry's Publications.
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